Telecommunication Sector (Grameenphone)

A report submitted to the Department of Accounting of AIUB, in part fulfillment

of the requirements of the final examination in course
Accounting Information System
Summer-2012-2013

Prepared & Submitted by

Hasan, MD. RAGIB 11-18725-1

Biswas, Animesh 11-18760-1
Aslam, Gazi Anica 10-17320-3
Asha, Alimah Islam 11-18795-1

Course Teacher
MD. JOYNAL ABEDIN

Date of Submission
20th July, 2013

American International University-Bangladesh (AIUB)

Page 1
 Executive Summary

This report is actually the overall work that we have learned throughout the whole semester
from course- Accounting Information System from the course teacher- MD. Joynal Abedin. We
have learned what is AIS, its importance in different sectors, subsystems of AIS, tasks of different
subsystems, different flow chart based on activities, etc. In this report we implement our academic
knowledge into real life.

We choose an industry- Telecommunication. We worked on Grameenphone Ltd. We tried

to find out their activities related to the AIS Subsystems. We draw several flow chart from the
information we got from their employees.

This report will help you to find out the activities of Grameenphone. Actually how they
pay their employee, how they purchase, their chain of command, etc.

Page 2
 Acknowledgement

First and foremost, we would like thank our course teacher of the Accounting Information
System course MD. Joynal Abedin for his guidance, coordination and advice. We would like to
thank for his instructions by those us able to complete our report. His willingness to motivate us
contributed tremendously to our work. He helped us a lot on this report. We also would like to
thank for his valuable time by helping us for this term paper.

Secondly, we would like to give thanks to the employees of Grameenphone who helped us
by giving their answers, support, by providing information. We are really thankful to them as they
gave their precious time to us. Their cooperation really helped us a lot to analyze and finalize this
report. We greatly appreciate their sincere co-operation.

Finally, an honorable mention goes to all of those who supported us in any respect
during the completion of this report. Our friends, teachers, family persons. Thanks to them for
supporting us in completing this report.

Page 3
 Table of Contents

Chapter Topics Page No.

1. Executive Summary 02
01 2. Acknowledge 03
3. Table of Contents 04

1. Introduction 05
2. Importance of AIS 06
3. Subsystem of AIS 07
4. HR Cycle 09
02 5. Revenue Cycle 11
6. Expenditure Cycle 13
7. Financing Cycle 15
8. Reporting Cycle 16

1. Conclusion 17
03 2. Reference 18

Page 4
 Telecommunication Industry

Communication in Bangladesh is based on Telephone, mobile communication, TV

Broadcast, Radio, Internet etc. Three types of radio broadcast stations; AM15, FM 13 and
shortwave 2.

The liberalization of Bangladeshs telecommunications sector began with small steps in

1989 with the issuance of a license to a private operator for the provision of inter alia cellular
mobile services to compete with the previous monopoly provider of telecommunications services
the Bangladesh Telegraph and Telephone Board (BTTB). Significant changes in the number of
fixed and mobile services deployed in Bangladesh occurred in the late 1990s and the numbers of
services in operation have subsequently grown exponentially in the past five years.

Bangladesh has currently six mobile phone operators in Mobile Telecommunication

Industry, of which five are in operation and the sixth, Warid Telecom, is expected to begin
operation in April, 2007. Though the industry is relatively new yet the growth is much faster in
comparison to other industries due to aggressive market oriented business strategy (Yousuf et al.,
2006). Bangladeshs phone sectors witnessed a 120 percent growth from January 2006 till now,
with the numbers of users rising to 22 million from 10.8 million in 13 months.

Grameenphone Ltd. is the only company from those six, is listed in Dhaka Stock Exchange.
Under the telecommunication sector of DSC, there are only two companies. One is Grameenphone
and another one is Bangladesh Submarine Cable Company Limited (BSCCL). The rest of five
mobile operator companies are not listed in DSC.

Grameenphone:
Grameenphone was listed as a public limited company in 2009. This is one of the
most successful mobile phone operators in our country. Their Network System is
the main strength. This is a service provider company.
Bangladesh Submarine Cable Company Limited (BSCCL):
Bangladesh Submarine Cable Company Limited (BSCCL) was listed as a public
limited company in 2012.Bangladesh Submarine Cable Company Limited is a core
telecommunications service provider and International Submarine Cable Operator
of Bangladesh. This is also a service provider company.

As Telecommunication Industry is consists of Service provider companies, in this industry

there will be four subsystems. The Production subsystem of AIS will no longer exist here.

Page 5
Importance of AIS in our Industry:
AIS is all about Systems. This is a system of collection, storage and processing of financial
and accounting data. This system helps to make decision, make report, etc. Accounting
Information System is generally a computer-based method for tracking accounting activity in
conjunction with information technology resources. The resulting statistical reports can be used
internally by management or externally by other interested parties including investors, creditors
and tax authorities.

This computer based Accounting system is more appropriate and helpful than pen paper
based Accounting system. Now a day, AIS is becoming more and more important part for any
company if they want to keep proper records of their daily transactions.

In this project our selected industry is Telecommunication. In this sector there are two listed
company. One is Grameenphone (GP) and another one is Bangladesh Submarine Cable Company
Limited (BSCCL). Both companies are service Provider Company. For any service provider
company, using of AIS is an important factor.

The importance of using AIS in Telecommunication sector are given below;

Most importantly AIS is need for proper decision making.

AIS will help the company to keep record of their Cost that they are sacrificing and Benefit
that they are getting.
Now the financing department is able to perform the activities more effectively by the help
of computer.
Record the Expenses and the sources of Revenues.
Summarize the yearly report within very short time.
To reduce Human effort, AIS is important in Telecommunication sectors.
Those companies provide online service too. For that AIS will help the users to get the
database easily.
Locate and evaluate information sources on accounting information systems.
Identify the problem and solve.
Maintain a proper Accounting system

Therefore, we can conclude that without all of those factors, there are some other important
factors of using AIS in Telecommunication Sector. Using AIS is important in this industry as
like as other industries.

Page 6
Subsystems of Accounting Information System:

There are five main subsystems of AIS. Those five are related to each other. They have a
flow of data, fund, product etc. Those are following;

1) Revenue Cycle: involves activities of selling goods or services and collecting payment for
those sales. It also deals with the accounts receivable.
2) Expenditure Cycle: involves activities of buying and paying for goods or services used
by the organization.
3) Human Resources/Payroll Cycle: involves activities of hiring, managing, training and
paying employees.
4) Production Cycle: involves activities converting raw materials and labor into finished
goods.
5) Financing Cycle: involves activities of obtaining necessary funds to run the organization,
repay creditors, and distribute profits to investors.

Chart: AIS Subsystems.

Page 7
 All those cycle are related by give and get transections.

Give: Cash
Financing Cycle Get: Cash

Give: Cash
Expenditure Cycle Get: Raw Materials

Give: Raw Material

Production Cycle Get: Finish Goods

Give: Finish Goods

Revenue Cycle Get: Cash

Give: Cash
HR Cycle Get: Labor force

There are another cycle called reporting cycle. We can call this cycle also the organogram of
the company or organization. Its indicate who will report to whom. This is another important
cycle of AIS.

Subsystems in our Industry:

As our industry is service provider industry, there is no question of having production
cycles in this industry. In our selected industry we have rest of the four cycles.

1) HR Cycle
2) Revenue Cycle
3) Expenditure Cycle
4) Financing Cycle.

Those are given below along with the reporting cycle.

Page 8
HR Cycle:
Human Resources/Payroll Cycle involves activities of hiring, managing, training and
paying employees.

Give: Cash and Get: Labor Force

The main activities of HR Cycle are following;

Recruit, hire, and train employees

Evaluate and promote employees
Discharge employees
Update payroll records
Calculate and disburse tax and benefit payments

The HR/Payroll cycle of Grameenphone is given below;

Page 9
 Employee GP ERS Supervisor

Check
Data LOG IN Data
Count total time

LOG OUT Approve

Send a copy to HR

Data Data

Finance Dept. HR Dept.

Data Re-check
Fund (Salary Payment)

Calculate the salary Approve

Fund deposit Send a copy to Finance
Data
Approve Dept.
Fund (Deposit)

Data
Data

Bank
Data

Salary Clear
Keep Records
Send copy to Finance & HR

Chart: HR Cycle of Grameenphone.

Page 10
Revenue Cycle:

Revenue Cycle involves activities of selling goods or services and collecting payment for
those sales. It also deals with the accounts receivable.
Give: Finish Goods and Get: Cash

Four basic business activities performed in the revenue cycle:

Sales order entry
Shipping
Billing
Cash collections

Other important activities done on the revenue cycle:

Handle customer inquiries
Take customer orders
Approve credit sales
Check inventory availability
Initiate back orders
Pick and pack order
Ship goods
Bill customers
Update sales and Accts Rec. for sales
Receive customer payment
Update Accts Rec. for collections
Handle sales returns, discounts, and bad debts
Prepare management report
Send info to other cycles

The Revenue Cycle is given below.

Page 11
 Fund Fund
GP Tools

Fund
Registered
Fund
Customer Agent BANK
Service

Service

Fund
Service

Client Service Finance Dept.

Customer
Service

Fund
Stakeholder Relationship
Management

Investment

Client/Investor Stock Market

Stock Market

Ownership

Chart: Revenue Cycle of Grameenphone

Page 12
Expenditure Cycle:

Expenditure Cycle involves activities of buying and paying for goods or services used by
the organization.

Give: Cash and Get: Raw Material

The basic business activities performed in the revenue cycle:

Requisition goods and services

Process purchase orders to vendors
Receive goods and services
Store goods
Receive vendor invoices
Update accounts payable for purchase
Approve invoices for payment
Pay vendors
Update accounts payable for payment
Handle purchase returns, discounts, and allowances
Prepare management reports
Send info to other cycles

The Expenditure cycle of Grameenphone is given below;

Page 13
 Employee Requesting
Store Dept.
Requisition
Check the Approve request
Availability
Prepare RF
Goods Send to the
YES Purchasing Dept.
Requisition
NO

RF
Receiving Dept. Purchasing Dept.
Data

PO

Data
Accounts
Dept.
Goods

Bill

Vendor

Fund

Chart: Expenditure Cycle of Grameenphone

Page 14
Financing Cycle:

Financing Cycle involves activities of obtaining necessary funds to run the organization,
repay creditors, and distribute profits to investors.

Give: cash and Get: Cash

The basic business activities performed in the Financing cycle:

Forecast cash needs

Sell securities to investors
Borrow money from lenders
Pay dividends to investors and interest to lenders
Retire debt
Prepare management reports
Send info to other cycles

Page 15
Reporting Cycle:
Reporting Cycle is a diagram that shows the structure of an organization and the
relationships and relative ranks of its parts and positions/jobs. The term is also used for similar
diagrams, for example ones showing the different elements of a field of knowledge or a group of
languages. Its indicate who will report to whom.

Reporting Cycle of Grameenphone is given below;

Chart: Reporting Cycle of Grameenphone

Page 16
 Conclusion
Bangladesh has a huge potential in WiMax and submarine cable which is a new technology
in the country and has attracted the foreign telecom operators. Many foreign telecom operators are
coming to Bangladesh to explore the potentiality of the technology. Some interested international
telecom operators who want to start a business in Bangladesh are UK-based Orange Telecom,
South Korean SK Telecom and UAEs Etisalat.
The government is encouraging private sector to invest more in the industry as they think
that the industry is playing a vital role in developing the socioeconomic structure of the country.
And to ensure that, the government has taken several attempt. Giving private sector the license for
fixed line telephone is one of those attempts. Due to the environmental facts, the foreign entrants
should adjust their equipment according to demand of the environment.

Grameenphone is one of the leading telecom

service provider company in Bangladesh. Grameenphone
was the first company to introduce GSM technology in
Bangladesh. It also established the first 24-hour Call
Center to support its subscribers. With the slogan Go
Beyond, Grameenphone promises its customers to bring the
best of communication technologies so that they can Go
Beyond. AIS is all about Systems. This is a system of
collection, storage and processing of financial & economic
Data into accounting data. This system helps to make decision, make report, etc. This computer
based Accounting system is more appropriate and helpful than pen paper based Accounting
system. Now a day, AIS is becoming more and more important part for any company if they want
to keep proper records of their daily transactions.

Page 17
 Reference

We collected our data from both primary and secondary source. We collected some of the
data from web site and rest of from the employee of Grameenphone.

Employee:
1. Mehedi Hasan: Customer Manager
2. Shah Junaid Islam: Ex- Client service Officer
3. Robiul Islam: Marketing Dept.

Web Site:
1. http://grameenphone.com/
2. http://en.wikipedia.org/wiki/Grameenphone
3. http://en.wikipedia.org/wiki/Telecommunications_in_Bangladesh
4. http://www.scribd.com/doc/14528878/Accounting-Information-System
5. http://en.wikipedia.org/wiki/Accounting_information_system

These are the sources from where we collected our data for this report.

Page 18